Gender-Specific Stochastic Frontier Health Efficiency Model in Malaysia

Abstract

This study addresses an important issue of efficiency of national health care systems and develops an appropriate stochastic frontier gender-specific health efficiency model where the inefficiency term is modeled as a linear function of relevant explanatory variables. We used the latest data available on life expectancy as health outcomes and number of doctors, number of nurses, total health expenditure, GDP in prices as the inputs. Using the likelihood-ratio test, Translog stochastic frontier gender-specific health efficiency model is found an appropriate in Malaysia. From the result, total health expenditure is found significant and positively impact on life expectancy that indicates an increase in total health expenditures is expected to higher the overall health outcome measured by life expectancy while GDP in prices is observed unexpected to have a negative effect on life expectancy but significant. The population density in Malaysia is recorded to reduce the inefficiency on life expectancy and the total fertility rate is noticed unexpected to increase the inefficiency. The number of government hospitals, number of beds, and demographic rates like crude birth rate, crude death rate, infant mortality rate, and maternal mortality rate are found to reduce the inefficiency on life expectancy in good health in Malaysia. The average health efficiency for both male and female was 0.9321 and 0.9946, indicating that on an average, 93.2 percent for male and 99.4 percent for female of the health outcome potentials are realized by country Malaysia. Year-wise gender-specific health efficiency periodically fluctuates during the period of investigation. The study recommends that governments improve not only health care expenditure but also factors affecting health other than health care to reduce the burden on health-care facilities and reduce the burden of disease in Malaysia.